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March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL)

Canadian Natural Resources Limited (CNRL) · Mar 20, 2015 · 64 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 1
    CORPORATE PRESENTATION March 2015
  2. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 2
    Delivering Value and Growth SNAPSHOT 2014 2015F Cash flow(1) (C$ million) $9,587 $6,100 - 6,500 Per share ? basic(1) (C$) $8.87 $5.60 - 6.00 Capital expenditures (C$ million) $11,744 $6,040 Dividend (C$/Share) $0.90 Common shares…
  3. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 3
    2014 2015F Oil WTI (US$/bbl) $92.92 $54.99 Natural gas NYMEX (US$/MMbtu) $4.37 $3.07 Natural gas AECO (C$/GJ) $4.19 $2.95 Heavy oil diff (%) 21% 27% Exchange rate (C$ = XUS$) $0.91 $0.80 Company Gross Reserves of crude oil and…
  4. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 4
    CNQ Five Key Messages Slide 2 Strong financial position Large, balanced, high quality asset base Transitioning to long life, low decline assets Increasing sustainable free cash flow through organic profitable growth Unlocking…
  5. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 5
    CNQ ? Long term ratings ?S&P: BBB+ (Stable Outlook) ?Moody?s: Baa1 (Stable Outlook) ?DBRS: BBB High (Stable Trend) ? Short term ratings ?S&P: A-2 ?Moody?s: P-2 ? Strong financial position as of December 31, 2014 ?Debt/book…
  6. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 6
    CNQ 1P Reserves After Royalties SIGNIFICANT VALUE TO UNLOCK Slide 4 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 CNQ CNQ 2014 2013 Note: Sourced from 2013 corporate reports. Peers include: APA, APC, EOG,…
  7. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 7
    CNQ 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2P Reserves Before Royalties SIGNIFICANT VALUE TO UNLOCK Slide 5 Based on forecast pricing assumptions. Note: Sourced from 2013 corporate reports. Peers include:…
  8. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 8
    CNQ ? Transitioning to long life, low decline asset mix ? Conventional assets deliver field operating free cash flow ? Pelican Lake crude oil ?Leading-edge polymer flood ?Top tier operating costs deliver field operating free cash…
  9. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 9
    CNQ 0% 10% 20% 30% 40% 50% 60% 70% 2007 2011 2015F 2018F Horizon - Sold as Synthetic Crude Oil Thermal In Situ - Sold as Heavy Crude Oil Pelican Lake - Sold as Heavy Crude Oil Transitioning to a Longer Life Asset Base LONG…
  10. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 10
    CNQ -$3 -$2 -$1 $0 $1 $2 $3 $4 $5 $6 $7 $8 2014 2015F 2016F 2017F 2018F 2019F 2020F Targeted Total Corporate Free Cash Flow GROWING FREE CASH FLOW ($ Billion) Note: Dependent upon economic and regulatory conditions,…
  11. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 11
    CNQ ? Resource development ?Executing our defined plan ?Transitioning to a longer life low decline asset base ?Capital flexibility allows us to be nimble ? Dividends ?15 consecutive years of dividend increases ?Must be sustainable…
  12. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 12
    CNQ 0 200 400 600 800 1,000 1,200 1,400 1,600 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dividend Share Purchase Horizon Phase 1 build years Return to Shareholders RETURNS TO SHAREHOLDERS A PRIORITY…
  13. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 13
    CNQ Canadian Natural 2015 Capital Budget Slide 11 ($ million) 2014 2015F Natural gas $767 $490 Crude oil Pelican Lake 246 175 Primary Heavy 1,253 545 Thermal In Situ 1,039 460 Light Canada 639 260 International 823 1,165…
  14. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 14
    CNQ Canadian Natural 2015 Production Budget STRATEGIC, DEFINED GROWTH PLAN Slide 12 Targeted Production 2014 2015F % Change(1) Crude oil (Mbbl/d) North America Light Oil & NGLs 89 91 - 96 5% Pelican Lake 50 53 - 55 8% Primary…
  15. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 15
    CNQ Balanced, Diverse Portfolio BUILDING A WORLD CLASS COMPANY Slide 13 ? Balanced, diverse production mix ? International exposure ? Vast, balanced resource base to develop ? Growing free cash flow Heavy Crude Oil ~35% Light…
  16. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 16
    CNQ North America Natural Gas & NGLs Core Area Summary ? Largest natural gas producer in Canada ? Q4/14 natural gas production of 1,705 MMcf/d ? Q4/14 average NGLs yield over 24 bbl/MMcf ? Large resource base ? 9.47 Tcfe…
  17. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 17
    CNQ 2014 2015F % Change Production (MMcf/d)* 1,527 1,655 - 1,692 10% Drilling (net wells) 76 21 Capital ($ million) $767 $490 ? Capital discipline ? Preserve land base for increasing natural gas prices ? 2015 operating cost…
  18. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 18
    CNQ North America Light Crude Oil 2014 Facts ? Q4/14 light crude oil and NGLs production ? ~96 Mbbl/d ? 2014 light crude oil activity ? 101 wells ? 2 Enhanced Oil Recovery (EOR) pilots at Nipisi and Grand Forks ? 2P reserves ?…
  19. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 19
    CNQ ? 2015 activity ? Target multiple formations across basin ? Leverage infrastructure and ?Drill-to-Fill? ? Drive capital efficiencies ? Maximize value ? Opportunities to optimize facilities and operating costs ? Leverage…
  20. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 20
    CNQ International Light Crude Oil ? Q4/14 light crude oil production ? ~34 Mbbl/d ? 2P light crude oil reserves ? 457 million barrels* ? Long reserve life ? Low decline water floods ? Exploitation based ? Exploration upside LONG…
  21. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 21
    CNQ ? Offshore Africa ?Espoir 10 well infill drilling program targeting to add 5,900 BOE/d ? First oil targeted for Q1/15 ?Baobab 6 well drilling program targeting to add 11,000 BOE/d ? First oil targeted for Q2/15 ? North Sea ?4…
  22. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 22
    CNQ ? C?te d?Ivoire ?CI-514 ? CNQ 36% WI ? First exploratory well encountered 40 meter column of 34 degree API crude ? Second exploratory well targeted up-dip for first half of 2015 ?CI-12 ? CNQ 60% WI ? 3D seismic acquired and…
  23. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 23
    CNQ Primary Heavy Crude Oil Core Area Summary ? Largest primary heavy oil producer in Canada ? Record Q4/14 production of ~144,700 bbl/d ? Delivering strong execution ? Extensive land base and infrastructure ? Over 8,000…
  24. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 24
    CNQ 2014 2015F %Change Production (Mbbl/d) 143 130 - 133 (8%) Drilling (net wells) 896 170 Recompletion (net wells) 637 568 Capital ($ million) $1,253 $545 Primary Heavy Crude Oil 2015 Plan STRONG CASH-ON-CASH RETURNS Slide 22…
  25. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 25
    CNQ Pelican Lake Crude Oil ? Wabiskaw heavy crude oil pool ? Industry leading EOR project ? Amongst the largest polymer floods in the world ? Technology development continues to improve crude oil recovery ? Leading example of…
  26. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 26
    CNQ 2014 2015F %Change Production (bbl/d) 50 53 - 55 8% Drilling (net wells) ? Producers & Injectors 24 2 Capital ($ million) $246 $175 Pelican Lake 2015 Plan TECHNOLOGY ADVANCEMENT PROVIDES SIGNIFICANT UPSIDE Slide 24 See…
  27. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 27
    CNQ Thermal In Situ Oil Sands Land Holdings VAST LAND BASE AND GREAT ASSETS = FLEXIBILITY Slide 25 CNQ Lands Cenovus Conoco Devon Shell Suncor Syncrude All Others Birch Mtn. Gregoire Kirby Leismer Ipiatik Grouse…
  28. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 28
    CNQ Thermal In Situ Oil Sands Tremendous Potential MASSIVE RESOURCE TO DEVELOP Slide 26 McMurray 49 billion barrels Wabiskaw 9 billion barrels Carbonates 10 billion barrels Clearwater 14 billion barrels Grand Rapids 15…
  29. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 29
    CNQ Thermal In Situ Oil Sands Growth Plan CAPTURING VALUE BY DOING IT RIGHT Slide 27 ? 522,000 bbl/d of oil facility capacity in the defined growth plan ? 40,000 - 60,000 bbl/d addition every 2-3 years ? 100% working interest and…
  30. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 30
    CNQ Thermal In Situ Oil Sands 2015 Plan 2014 2015F % Change Production (Mbbl/d) 108 126 - 140 23% Drilling (net wells) Primrose producers 11 ? Kirby producers 4 3 Strats 78 27 Service / observation wells 65 20 Total 158 50…
  31. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 31
    CNQ Horizon Oil Sands - Operations Core Area Summary ? World Class asset ? 14.4 billion barrels BIIP(1) ? 2P SCO reserves ? 3.6 billion barrels(2) ? Best estimate contingent resources other than reserves ? 3.7 billion barrels of…
  32. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 32
    CNQ ? Enhanced reliability ? Continued focus on safe, steady and reliable operations ? Plant utilization of 89% in 2014 ? December 2014 production ~136,000 bbl/d or 99% utilization ? Greater focus on operating cost efficiencies ?…
  33. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 33
    CNQ 99 89 87 84 76 87 84 84 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 YTD 2015 CNQ 2014 CNQ Peer 1 Peer 2 CNQ Peer 1 Peer 2 Horizon Oil Sands - Operations Industry Leading…
  34. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 34
    CNQ Horizon Oil Sands - Expansion 2015 Plan ? Phase 2/3 Project Expansion FOCUS ON PROJECT EXECUTION Slide 32 2014 2015F Project Capital ($ million) Reliability ? Tranche 2 $60 $0 Directive 74 and Technology 129 55 Phase 2A 95 45…
  35. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 35
    CNQ Horizon Oil Sands - Expansion Production Capacity Plan FUTURE EXPANSION CREATES VALUE Slide 33 Actual/Forecast Capacity Target 12,000 bbl/d added 45,000 bbl/d added 80,000 bbl/d added Phase 2A Phase 2B Phase 3 Note:…
  36. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 36
    CNQ Horizon Oil Sands ? Operations Targeted Operating Costs IMPROVING ECONOMICS THROUGH EXPANSION Slide 34 ($ million) ($/bbl) Targeted Operating Cost per Year Targeted Operating Cost per Barrel *Phase 1 & 2A reflect 2015F data.…
  37. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 37
    CNQ -$3 -$2 -$1 $0 $1 $2 $3 $4 $5 $6 $7 $8 2014 2015F 2016F 2017F 2018F 2019F 2020F Targeted Total Corporate Free Cash Flow GROWING FREE CASH FLOW ($ Billion) Note: Dependent upon economic and regulatory conditions,…
  38. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 38
    CNQ 0 200 400 600 800 1,000 CNQ EOG PXD DVN APA APC SU CVE Committed Management ? Substantial management and director wealth at stake ? Strong motivation for management to perform ? Delivers clear alignment with shareholder…
  39. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 39
    CNQ ? Strong Balance Sheet ? Large, diversified, well balanced asset base ? Transition to longer-life, low decline assets reduces capital requirements while maintaining production ? Delivering increasing and more sustainable free…
  40. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 40
    PROVEN EFFECTIVE STRATEGY PREMIUM VALUE, DEFINED GROWTH, INDEPENDENT. Appendices
  41. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 41
    CNQ ? Record quarterly production ? 860,900 BOE/d ? 27% YOY growth ? 572,000 bbl/d crude oil & NGLs ? 20% YOY growth ? 1,733 MMcf/d natural gas ? 45% YOY growth ? Record Horizon SCO production ~ 128,100 bbl/d ? Upgrader utilization…
  42. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 42
    CNQ North America Natural Gas & NGLs Our Montney Position Project Gas Sales Capacity (MMcf/d) Liquids Sales Capacity (bbl/d) Gas Price Required (AECO) Septimus Phase 1 57 5,555 On stream Septimus Phase 2 68 6,645 On…
  43. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 43
    CNQ North America Natural Gas & NGLs Duvernay Lands and Plans ? Over 480,000 net acres in total play area ? Strong positions in two sub basins with 30-60m net shale pay ? Gas liquids ? Oil ? Pembina ? 238,000 net acres ? Early…
  44. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 44
    CNQ International Light Crude Oil Cote d?Ivoire - Exploration EXPLORATION OPPORTUNITIES FOR VALUE CREATION Slide 42 12.5km CI-12 CI-515 CI-516 CI-115 CI-116 CI-514 Saphir-1X Espoir/Baobab Paon Oil Discovery 2012 CI-12 (CNQ…
  45. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 45
    CNQ Pelican Lake Polymerflood ? What is polymer? ? It is a non-toxic polyacrylamide powder mixed with water ? Why does it help recovery? ? Increases the viscosity of injected water improves sweep efficiencies, reduces bypassed…
  46. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 46
    CNQ 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Pelican Lake Production by Recovery Method THREE PRODUCING REGIMES ?…
  47. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 47
    CNQ Delivering Safety Excellence ? Safety is a core value ? Committed to continuous improvement ? No harm to people, no safety incidents ? Top tier recordable injury frequency in North America conventional operations SAFETY IS A…
  48. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 48
    CNQ ? Proactive environmentally responsible operations ? Drive continuous improvement to reduce environmental impacts ? Meet or exceed all regulatory requirements ? Reducing greenhouse gas intensity ? Restoring sites to natural…
  49. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 49
    CNQ $0 $50 $100 $150 $200 $250 $300 $350 $400 2008 2009 2010 2011 2012 2013 Leveraging Technology for Value & Performance ? Canadian Natural leading R&D investor ? Largest crude oil & natural gas R&D investor in Canada ?…
  50. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 50
    CNQ ? Incremental PADD 2 conversion capacity ? BP Whiting refinery capacity increase of 260,000 bbl/d ? Significant additional rail loading capacity in WCSB ? 1.4 Mmbbl/d of loading capacity by Q4/15 ? Approximately 200-300 Mbbl/d…
  51. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 51
    CNQ 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Western Canadian Refineries TMPL ENB- Ex Superior W. Access to PADD IV Clearbrook/Superior Keystone Base (in service)…
  52. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 52
    CNQ Superior Fort McMurray Kitimat Edmonton Steele City Sarnia Montreal Portland St. John Enbridge Gateway 525 Mbbl/d Crude Export Line (2018+) TMX Expansion 890 Mbbl/d (2018+) Seaway Pipeline Twin 850 Mbbl/d Vancouver…
  53. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 53
    CNQ ? Project sanctioned November 2012 ? 50,000 bbl/d additional bitumen conversion capacity ?Canadian Natural ? 50% ownership ? Return on capital generated by tolls ?30 year tolling agreement ?Tolls determined by project capital,…
  54. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 54
    CNQ Horizon Oil Sands - Expansion Expansion Progressing PHASE 2-3 PROGRESS Slide 52 2014 2011
  55. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 55
    CNQ Horizon Oil Sands Expansion By Phase Slide 53 Ore Preparation Plant Extraction Froth Treatment Plant Distillate Recovery Vacuum Distillate Unit Coker Drums Hydrotreaters ** Number of Units Capacity (bbl/d) Phase 1…
  56. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 56
    CNQ Bank Credit Facilities (C$ million) Maturity Revolving bank line 1 $3,000 June 2017 Revolving bank line 2 $1,500 June 2016 Non-revolving bank line 3(1) $1,500 April 2018 Non-revolving term facility $1,000 January 2017 Operating…
  57. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 57
    CNQ Maturity Schedule Public Debt BALANCED MATURITY PROFILE Slide 55 (C$ billion) Note: Represents principal repayments only and does not reflect fair value adjustments, original issue discounts or transaction costs. Reflects…
  58. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 58
    Advisory Free Cash Flow Pricing Assumptions 1. 2014 based upon actual; WTI of US$92.92/bbl, AECO of C$4.19/GJ, WCS differential of 21% and foreign exchange of US$1.00 to C$1.10. 2. 2015F based upon pricing assumptions at February 2015;…
  59. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 59
    Resource Disclosure(1) Horizon Oil Sands Synthetic Crude Oil Discovered Bitumen Initially-in-place 14,400 million barrels Proved Company Gross Reserves: 2,158 million barrels of SCO Bitumen volume associated with Proved SCO reserves…
  60. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 60
    Hedging (1) Western Canadian Select Note: The Company?s outstanding commodity derivative financial instruments are expected to be settled monthly based on the applicable As at March 5, 2015, the Company had the following net derivative…
  61. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 61
    Key Historic Data Operational Information 2009 2010 2011 2012 2013 2014 Daily production, before royalties Crude oil and NGLs (Mbbl/d) 355 425 389 451 478 531 Natural gas (MMcf/d) 1,315 1,243 1,257 1,220 1,158 1,555 Barrels of oil…
  62. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 62
    Realized product pricing, before hedging activities & after transportation costs Crude oil and NGLs (C$/bbl) 57.68 65.81 77.46 70.24 71.59 74.63 Natural gas (C$/Mcf) 4.53 4.08 3.73 2.44 3.30 4.56 Results of operations (C$ million,…
  63. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 63
    Corporate Guidance March 5, 2015 Q1/15 Guidance 2015 Updated Guidance Daily Production Volumes (before royalties) Natural gas (MMcf/d) 1,785 - 1,805 1,730 - 1,770 Crude oil and NGLs (Mbbl/d) North America 283 - 291 274 - 284…
  64. March 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 64
    Note: Interest rates are subject to change depending upon short term rate changes. Cash income taxes are subject to variation with commodity prices and the level and classification of capital expenditures. Cash PRT is subject to…

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